MAC Enquiry into Tier 1 Entrepreneur Visa Route

The Government has commissioned the Migration Advisory Committee (MAC) to review the Entrepreneur routes into the UK with a view to trying to ensure that the potential economic benefit of the routes is maximised. The MAC will also consider the attractiveness of the routes to genuine entrepreneurs.

Tier 1 of the Points Based System provides a means by which high value migrants can come to the UK. There are four routes within Tier 1: Entrepreneur; Graduate Entrepreneur; Investor; and Exceptional Talent.

The MAC has been asked to report to the Government by the end of September 2015 and there is a consultation exercise open to 12 June.

The Tier 1 (Entrepreneur) category is for individuals who wish to invest in the UK by establishing or taking over, and being actively involved in the running of, a business or businesses in the UK. Those who apply under the Tier 1 (Entrepreneur) category must demonstrate that they have access to £200,000 which they will invest in a business or businesses in the UK. Applicants can form an entrepreneurial team with one other Tier 1 (Entrepreneur) applicant and share the same investment funds.

A lower threshold of £50,000 is sufficient where that funding has been provided by a specified body.

The funding must be held in one or more regulated financial institutions, must be disposable in the UK, and must have been held on an ongoing basis rather than just at the time of application. Applicants are also subject to a genuineness test and, from April 2015, are required to provide a business plan, although that has been an unwritten rule for some time.

In the four quarters to 2014 Q4, entry clearance visas were issued to 1,089 Tier 1 (Entrepreneur) and 175 Tier 1 (Graduate Entrepreneur) main applicants. A further 2,307 entry clearance visas were issued to their dependants.

The MAC will also consider the potential costs of a migrant entrepreneur, for example, the potential for an entrepreneur to displace an existing business. MAC is trying to find out what the impact is of migrant entrepreneurs on UK residents and whether this impact can be enhanced.

At present, the Home Office takes the amount of money available as a positive sign of the entrepreneurial skills of the migrant. The immigration officials can ask to see more evidence such as a business plan but the MAC is aware of some agencies that offer to provide “professional” business plans to prospective entrepreneur route applicants.

Other countries also have an entrepreneur route and the MAC will be considering whether the UK can learn from other countries’ experiences.

MAC is also keen to solicit responses to the following questions:

  1. At what point can MAC reasonably expect that a migrant granted leave as an entrepreneur to have established a successful business?
  2. How could MAC ensure effective monitoring of the progress of migrant entrepreneurs’ businesses?
  3. How should the entrepreneur visa regime deal with failure of the migrant’s business?
  4. What would be reasonable criteria for granting extensions to the initial period of leave granted to entrepreneurs?

We will be submitting comments to MAC and have invited some individuals we have worked and are working with to obtain Tier 1 Entrepreneur visas to also submit comments. MAC is also convening meeting with professional firms like ourselves in order to receive feedback. My view is the process is currently too restrictive with many entrepreneurs prevented from getting in to start their business because the £200,000 level is too high. There also seems to be a lack of monitoring once the visa has been granted to see if the entrepreneur is actually doing what they are meant to be doing. In theory, there can be an on-going review but in practice the only review is at the end of year 3 when the time comes for a visa extension application.

It seems likely that changes to the visa will be announced following the consultation with those changes being implemented either in October 2015 or more likely April 2016.

Tom Redfern